Category: 1099's

What is a Form 1099-C? Cancellation of Debt (View a sample form)

A 1099-C is received when you have a debt (home, credit card, student loan, etc.) cancelled. This happens when you receive money initially but are not required to pay all or an amount back to the borrower. Because you are not paying the debt back, the IRS considers the amount as taxable income, and it must be reported on your return.

However, there are certain circumstances when you can exclude the cancelled debt from your income. For information about these circumstances, click here.